East Development Limited v ALV Development Limited - [2020] NZHC 429

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1117

[2020] NZHC 429

BETWEEN
EAST DEVELOPMENT LIMITED

Plaintiff/Applicant

AND

ALV DEVELOPMENT LIMITED

Defendant/First Respondent

GERA PROPERTY LIMITED
Second Respondent (Third Party)

FREDERIC CHEE KIONG LEE
Third Respondent (Third Party)

GRACE KAKE NYUK WONG

Fourth Respondent (Third Party)

Hearing: 28 February 2020

Appearances:

J G Ussher for the Plaintiff/Applicant M R Taylor for the Respondents

Judgment:

6 March 2020

JUDGMENT OF POWELL J

This judgment was delivered by me on 6 March 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

EAST DEVELOPMENT LIMITED v ALV DEVELOPMENT LIMITED [2020] NZHC 423 [6 March 2020]

[1] The plaintiff, East Development Limited (“EDL”), has sought to sustain freezing orders against the first and second respondents, ALV Developments Limited (“ALV”) and Gera Property Limited (“Gera”), and also seeks ancillary orders, namely provision of information, from all four respondents.

[2] The orders sought by EDL are opposed by the respondents on the basis that they are neither necessary or appropriate.

Background

[3] There is no dispute that in April/May 2017 ALV failed to complete a purchase of a property owned by EDL at 20 Waterloo Street, Howick. An initial summary judgment application seeking specific performance was however withdrawn by EDL when it became clear that EDL had in fact already cancelled the agreement. EDL subsequently sold the property to a third party and has sought damages from ALV for the loss suffered. A subsequent summary judgment application was however not given leave to proceed, the Judge being unconvinced that EDL “could satisfy me on a summary judgment application that it has acted reasonably in mitigating its losses and effecting a bona fide resale, such that ALV has no defence to its cause of action.”1

[4] As a result, EDL’s claims have proceeded by way of ordinary proceedings and are set to be heard in August 2020.

[5] The present freezing orders were granted by Downs J on 23 October 2019 and subsequently extended to the present hearing. Downs J declined the application for ancillary orders which continue to be sought by EDL.

[6] The freezing orders were prompted when EDL became aware that ALV was selling a property it owned at 10 Michael Richard Place, Tamaki Heights (“Michael Richard Place”), which was in fact transferred from ALV to Gera on 8 October 2019. In applying for the freezing orders EDL sought to prevent ALV from dissipating the sale proceeds and Gera from dealing further with Michael Richard Place, while at the

1 East Development Ltd v ALV Developments Ltd [2018] NZHC 3456 at [42].

same time obtaining from the respondents an explanation for the transaction via the imposition of the ancillary orders.

[7] Since the orders were obtained the third respondent Frederic Lee has filed an affidavit in which the following asserted matters are largely supported by exhibits:

(a)On 11 May 2017, ALV became the registered proprietor of a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading East Development Limited v ALV Development Limited

Details

AGLC: East Development Limited v ALV Development Limited [2020] NZHC 429
Case: [2020] NZHC 429
Decision Date: 6 March 2020

CaseChat Overview and Summary

East Development Limited initiated proceedings against ALV Development Limited, Gera Property Limited, Frederic Chee Kiong Lee, and Grace Kake Nyuk Wong to sustain freezing orders against ALV and Gera, and to obtain further information from all respondents. The background of the case involved a failed property sale between EDL and ALV in 2017, followed by EDL's attempt to mitigate its losses by selling the property to a third party. EDL sought damages from ALV, which led to the initial granting of freezing orders by Downs J to prevent ALV from dissipating the proceeds from the sale of another property it owned. The respondents opposed the continuation of the freezing orders and the imposition of ancillary orders, arguing that they were unnecessary and inappropriate. The legal issues before the court were whether EDL had a good arguable case against ALV, whether there were assets available for the freezing orders, and if there was a real risk that the respondents would dissipate or dispose of those assets. The court found that EDL did not have a good arguable case against ALV as it had failed to appropriately mitigate its loss, and there were no assets available for the freezing orders. The court also found that there was no evidence of any intention by the respondents to dissipate their assets. The freezing orders were discharged, and the applications for ancillary orders were dismissed. The respondents were entitled to costs.

Orders